Loan Against Property (LAP)


Loan Against Property is a secured loan in which property (residential/commercial/industrial) is being used as a collateral to raise funds from a financial institution. Loan against property may be used for child education, business expansion, construction, renovation, buying another property etc.

Benefits

  • Lower rate of interest
  • Longer repayment tenure of upto 15 years

Computation of amount of Loan Against Property

The loan amount is based upon the market value of the property. The maximum amount is subject to Lon To Value (LTV), which varies from 50-70 % of the market value of the property.

For example, if your residential property (self occupied) is worth 100 lakhs in the market, you can avail a loan against property in the range of 50-70 lakhs depending upon the lending policies of financial institution and income of the applicant to pay the EMIs.

Eligibility criterion:

Eligibility of a candidate for LAP depends on several factors like:

  • Income of the applicant
  • Age
  • Qualification
  • Spouse’s income
  • No. of dependents
  • Market value of property
  • Savings History
  • Assets/Liabilities of the applicant
  • Stability and continuity of occupation

 

Entity

 

Salaried

Sole Proprietorship

Partnership

Private Limited Company

 

Individual

Proprietor

Partner

Director

Individual documents

Age & ID proof (any of the below): of Proprietor/Partner/Director

  • PAN Card
  • Passport
  • Drivers’ License
  • Aadhar Card

Yes

Yes

Yes

Yes

Residence Address Proof (any of the below): of Proprietor/Partner/Director

  • Passport
  • LIC Premium (not over two months old)
  • Utility Bill (not over two months old)
  • Arms License (not over two months old)
  • Mobile Bill (not over two months old)

Yes

Yes

Yes

Yes

Photograph of Proprietor/Partner/Director
with Signature

Yes

Yes

Yes

Yes

Sanction letter and schedules/Statement of loans in the name of individuals/partners/directors

Yes

Yes

Yes

Yes

Residence/Office Ownership (any of the below):

  • Electricity Bill
  • Sales Deed Copy

N.A.

Yes

Yes

Yes

IT Return/Form16 of last 3 Years

Yes

Yes

Yes

Yes

Photograph with Signature

Yes

Yes

Yes

Yes

Last 6 months bank statement of all operative accounts

Yes

Yes

Yes

Yes

In the case of transfer of a loan: Last 12 months of  loans statement  along with the Sanction Letter of your previous bank

Yes

Yes

Yes

Yes

Company/Firm related documents

Business continuity proof – 3 years income tax return & income  statement

N.A.

Yes

Yes

Yes

Last3year audit report and audited financials

N.A.

Yes

Yes

Yes

Business incorporation date proof – PAN Card

N.A.

N.A.

Yes

Yes

Office Address proof (any one of the flowing):

  • Utility bill (Electricity)
  • VAT/Sales Tax/Service Tax Registration certificate

N.A.

Yes

Yes

Yes

Partnership Deed

N.A.

N.A.

Yes

Yes

Certificate of Registration

N.A.

N.A.

Yes

Yes

List of current partners with shareholding on firm letterhead

N.A.

N.A.

Yes

Yes

MOA(Memorandum of Association ) and AOA (Articles of Association)

N.A.

N.A.

N.A.

Yes

Latest share holding pattern on company letterhead

N.A.

N.A.

N.A.

Yes

List of current Directors on company letterhead

N.A.

N.A.

N.A.

Yes

Certificate of Incorporation

N.A.

N.A.

N.A.

Yes

Property Papers

Latest Sale Agreement & Previous Chain of Titles with Sanctioned MAP

Yes

Yes

Yes

Yes

Occupancy Certificate

Yes

Yes

Yes

Yes